Business fuels IT industry race.

Author:Choudhury, Shatadru Roy
Position:Information technology industry in the Middle East

The advent of the information age has provided the Middle East with a promising opportunity to speed up economic growth. With impressive annual growth rates of between 15 and 20 per cent, analysts are convinced it is only a matter of time before the region's information technology (IT) industry reaches maturity and is able to act as a powerhouse for the rest of the economy.

The driving force behind the industry has been commerce. The huge gains in productivity and efficiency on offer have encouraged businesses to modernise their record-keeping practices and to speed up internal communication via the use of the latest computer software. For instance, the Middle East and Africa division of Xerox is estimated to have saved as much as $300,000 each year thanks to the development of the company's own intranet which has made the distribution of photocopier equipment, and the co-ordination of product launches and price changes far easier.

The sector's rapid growth is also attributable to the increasing perception among governments that the IT industry is the key to developing a highly skilled workforce capable of competing in global markets. Israel's success in building a robust economy is partly attributed to its heavy investment in teaching IT skills to its citizens, the subject is now compulsory on the school syllabus.

The direct result of this has been to put the IT industry at the heart of the Israeli economy: while technology only accounted for 3.5 per cent of corporate earnings in 1995, they are expected to exceed 10 per cent by the end of 1999.

Yet despite the ferocious speed at which the sector has been growing, several obstacles continue to impede the industry's development. In a region where state control of information tends to be tightly regulated, governments are concerned that technological advances may undermine their stability. Thus, many Middle Eastern nations have sought to restrict Internet and e-mail use in order to limit access to illegal material, such as pornography, and to prevent the Internet being used to encourage political unrest by opposition groups.

The upshot of this has been the inability of many Arab nations to fully reap the benefits the IT industry has to offer. Until this year, there was no public access to the Internet in Saudi Arabia, although those who could afford it were able to set up accounts in other countries. Iraq has gone one step further and made the ownership of modems and access to the Internet...

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